This article is an extract from Transmission Private's monthly newsletter, The Lede, which tracks the world of reputation management for private clients. You can sign up for the newsletter on our website via the tab at the bottom of this article or by completing the form here.
Good afternoon, welcome to this ‘succession special’ edition of The Lede. 👋 With everyone spending more time at home, there has been speculation about a potential coronavirus baby boom. I wondered whether there might actually be a succession boom too?
Why might there be a succession boom? Over recent months, many families have spent more time together. The enforced pause on many family’s day-to-day business activities has also given many individuals more time to have conversations about mission, purpose, and the future. Cue the difficult discussion about succession, which many families have been meaning to talk about for a while... but never got around to.
Why does this matter? We have been reading about the ‘great intergenerational wealth transfer’ for a number of years now, as Millennials continue to take more prominent positions in family businesses and family offices, but could coronavirus be the trigger point? The once-in-a-lifetime event that lights the touchpaper on the transition?
But, why does it matter really? While families have invested a lot of time in succession planning from a legal, financial, and structuring perspective, they are still highly exposed on the communications side. Let’s run through a few of the reasons.
- Family firms remain highly identified with first-gen founders. Many businesses still remain intimately linked with their original first-gen founder—sometimes to such an extent that the market identifies the success of the business solely with the founder. This is clearly dangerous. Families should broaden the image and talent base.
- Social capital. Whilst plans exist to effectively transfer financial capital, all the social capital—relationships, networks, reputation—that has been built up by the current generation still has not been transitioned to the next generation.
- Missed opportunity to highlight new skills. As well as avoiding the risks, giving more visibility to next-gen members in the business is an opportunity to showcase the new skills they are bringing to the business, such as an understanding of technology. Next-gen members in many cases cover the weaknesses and skill shortages of the former generation. This is positive that should be highlighted.
The upshot... we could be about to go into a succession boom. Families need to ensure they look after their communications just as well as their finances during this tricky, challenging process.
